Gartner (IT) Experienced Modest Declined in Q2 Amid Government Spending Cuts

Baron Funds, an investment management company, released its “Baron Asset Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. stocks rose amid volatility caused by tariff policies and Middle East tensions. Early April risk-off sentiment was fueled by Trump’s “Liberation Day” tariffs, seen as more severe than expected. U.S. equities rose after April 8, driven by favorable trade news, strong earnings, dovish Fed signals, and AI momentum, reaching record highs by quarter’s end. During the second quarter, the fund was up 7.85% (Institutional Shares) compared to an 18.20% gain for the Russell Midcap Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron Asset Fund highlighted stocks such as Gartner, Inc. (NYSE:IT). Established in 1979, Gartner, Inc. (NYSE:IT) is a research and advisory company that operates through research, conferences, and consulting segments. The one-month return of Gartner, Inc. (NYSE:IT) was -15.40%, and its shares lost 29.34% of their value over the last 52 weeks. On July 31, 2025, Gartner, Inc. (NYSE:IT) stock closed at $338.65 per share, with a market capitalization of $26.065 billion.

Baron Asset Fund stated the following regarding Gartner, Inc. (NYSE:IT) in its second quarter 2025 investor letter:

“Modest declines from the Fund’s sizable positions in Gartner, Inc. (NYSE:IT) and Roper Technologies, Inc. also contributed to relative weakness in the sector. Syndicated research provider Gartner was negatively impacted by reductions in government spending in its public sector business. We estimate U.S. federal exposure accounts for about 5% of Gartner’s total research contract value, with about half from the Department of Defense and intelligence organizations, and half from civilian agencies. While federal budget scrutiny remains high, we believe Gartner’s services deliver significant value to users, including the potential for hard dollar savings. Its private sector business appears well positioned for sustained growth, and management is adept at exercising cost controls to support margins and free cash flow generation. The company’s balance sheet is in excellent shape, and we expect management to take advantage of this drawdown through aggressive share repurchases.”

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Gartner, Inc. (NYSE:IT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held Gartner, Inc. (NYSE:IT) at the end of the first quarter which was 57 in the previous quarter. Gartner, Inc.’s (NYSE:IT) first quarter revenue was $1.5billion, representing a 4% year-over-year increase. While we acknowledge the risk and potential of Gartner, Inc. (NYSE:IT) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GARTNER, INC. (NYSE:IT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Gartner, Inc. (NYSE:IT) and shared the list of best information technology services stocks to invest in. Madison Large Cap Fund initiated a position in Gartner, Inc. (NYSE:IT) during Q2 2025. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.